No-Frills PeoplExpress Aims to Fly Again

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By the time low-fare airline PeoplExpress merged with Continental Airlines (NYSE:UAL), in 1987, a lot of people in the industry were convinced that the cheap-fare business model was feasible, but also that it worked only if the carrier’s operators truly understood their market.

Michael Morisi, who worked for the old PeoplExpress and retained the rights to the name, says he has learned from past mistakes and is preparing the airline for relaunch. As the new PeoplExpress chief operating officer, he is guiding the enterprise as it seeks the necessary regulatory approvals and is preparing an IPO to raise cash for the airline this spring. A new CEO has been selected, though Morisi told the Associated Press that he won’t be named until April because he is the former CEO of another airline.

Key to the success of PeoplExpress, which will be headquartered at Newport News-Williamsburg International Airport in southeastern Virginia, will be its focus on service to regional airports and its avoidance of national hubs, Morisi said. The carrier’s demise, he added, was due in large part to overexpansion, not to fares that at one point were as low as $19. PeoplExpress, the AP points out, was once the nation’s fifth-largest airline, and was profitable.

“I think we can build a very nice operation serving dozens of cities and never really encroach on some of the major hub cities that other carriers are dominant in,” Morisi said.

Like its predecessor, the new PeoplExpress plans to buy only Boeing (NYSE:BA) 737s. Unlike its predecessor, it may offer passengers regional foods and mircobrewed beers aboard its flights.


Article printed from InvestorPlace Media, https://investorplace.com/2012/02/no-frills-peoplexpress-aims-to-fly-again-ual-ba/.

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